Sourcing Lecture 5 Directing Sourcing And Services

Frank Willems

Groningen12-01-2011

ITSM Sourcing specialization 2010

Directing Sourcing and Services

2© Twynstra Gudde 2-6-2010


Agenda

– Shared Service Centers

– What is directing

– Processmodel for directing

– Roles within the directing organisation

– Learning Task 3

– Questions and answers



Shared Services



Definition and goal of a Shared Service Center (SSC)

– We speak about an SSC as supporting processes within an organization on an approximately similar way, are delivered a new, semi-autonomous unit and on the basis of agreements it provides services to other units

– The goal of an SSC is generally to improve the service quality while cutting costs

– SSC versus centralization, service-oriented versus task



Measures in perspective

Measures at task level:Stopping investments

Orcutting down on currentinitiatives

Measures at a process level:Collaboration and joint investments

Measures at a functional level:Concentration, integration, mergers,

Take-over or outsourcing

Saving potential

Short term(0,5-1 year

Medium term(1-2 years

Long term(2-5 years)

Stopping projects

Cutting down on training and learning

Cutting down on engaging external consultants

System optimazation

Collaboration regarding purchasing, support, etc.

Optimization and standardization of processes

Integration, mergers and concentration

Outsourcing of parts of the organization

Shared Services Centre

Full outsourcing

Capitalizingeffects



Concentration leads to economies of scale

Internal SSC

Insourcing/External Supplier

Cos

ts

Volume

Efficiency-effects

Economyof Scale



Are the trends moving up and down?C

osts

Volume

Startingpoint

Impact Scale reached Impact Scale

reached

Complexity Costs will increase

Yes, to take maximum concentration and complexity there will be need for new solutions.



Potential services for a SSCFacility Management

- mailroom

- copying and printing service

- archive

- purchase

- catering

Customer Service

- sales service

- telephone customer service (call center)

Administration

- financial administration

- pensions administration

- Payroll

Personelmanagement (HRM)

- recruitment and selection

- Personnel administration

- training

ICT Services

- application development

- Helpdesk

- Management and operation

- Training

- Real Estate Management

- management buildings

- Security management

- Sales and marketing

- ad coordination

- direct mail

- sales

- Tele ordering

- Order administration



Variants of Shared Services

supportfunctions

Management

primairy functions

Shared SupportProcess

Shared Business Process

Sharedback-offices



The components of Shared Services

How to manage the environment, where the process is cut and who is responsible for what processes?

What is the proper organization, which staff and how are we ready for the future?

How are technology, process and organization knotted together?

The core of the service

Kantoorinformatiesystemen

Bedrijfsinformatiesystemen

TechnischeInformatiesystemen

Functioneel

Specifiek

Generiek

Fysiek

ICT infrastructuur componenten

User Support enApplicatie Management

SystemManagement

ICT infrastructuurlaag

ICT functionaliteit

NetwerkManagement

ICT Functie/processen

Kantoorinformatiesystemen

Bedrijfsinformatiesystemen

TechnischeInformatiesystemen

Functioneel

Specifiek

Generiek

Fysiek

ICT infrastructuur componenten

User Support enApplicatie Management

SystemManagement

ICT infrastructuurlaag

ICT functionaliteit

NetwerkManagement

ICT Functie/processen

SSC 1SSC 1

SSC 3SSC 3

SSC 2 SSC 2

SSC 4SSC 4

Opstellen van Business

Cases


Cases

Inrichtenvan

processen

Inrichtenvan

processen

Managenvan

projecten

Managenvan

projectenGovernanceGovernance

RegieRegie

ArchitectuurArchitectuur

Processes

OrganizationSystems

Customers



Name the change components

Ontwikkelenmaatwerk

Ontwikkelenmaatwerk

Beheerinfrastructuur

Beheerinfrastructuur

Beheer &draaien

pakketten

Beheer &draaien

pakketten

Support/HelpdeskSupport/Helpdesk

OntwikkelenmaatwerkSSC 1

BeheerinfrastructuurSSC 3

Beheer &draaien

pakkettenSSC 2

Support/HelpdeskSSC 4

Response, context and vision of SSC's clear and design direction activities

Target focus on service domains

ICT-governance

Governance

RegieRegie ArchitectuurArchitectuur

Opstellen

van BusinessCases


Cases

Inrichtenvan

processen

Inrichtenvan

processen

Managenvan

projecten

Managenvan

projecten


Cases


Cases

Inrichtenvan

processen

Inrichtenvan

processen

Managenvan

projecten

Managenvan

projecten

Make Governanceagreements

Professionalizedemand

ICT-governance

Governance


Transformdemand management

ICT-governance

-Governance


SSC 1SSC 1

SSC 3SSC 3

SSC 2 SSC 2

SSC 4SSC 4


Cases


Cases

Inrichtenvan

processen

Inrichtenvan

processen

Managenvan

projecten

Managenvan

projectenGovernanceGovernance

RegieRegie

ArchitectuurArchitectuur



An Change approach for Shared Services

Change idea

….

Intervention-oriented communication about plan and implementation

Support by Change help desk

Assessment by Change board

Consultation with Sounding board groupCIOClient …

Characteristics of interaction

Characteristicsof employees

Characteristics ofproducts, pro-

cesses & structure

Clients, Governance &

suppliers

History

Rea

son

Environm

ent

View on change Kick off

Change analysis + Culture scan

DD MM YYYY

Change goals

Aligning structure and processes

Organizing control and and prepairing SSC implementation

Contracting and realizing SLA’s

Culture change and competence development

Learning to collaborate

Inter-ventionsAnd (re) planning

Reconsider-Ing

goals

Measuringprogress

Plateau 2

Inter-ventionsand (re)planning

Reconsider-ing

goals

Measuringprogress

Plateau 1



Example of a Target Efforts Network

More innovative power and sharing knowledgeMore innovative power and sharing knowledge

Higher efficiency pension processesHigher efficiency

pension processes

Better quality ICT services and

products

Better quality ICT services and

products

75% Reuse pension processes

and systems (FO & BO)

75% Reuse pension processes

and systems (FO & BO)

20% Faster market

introductionpension products

20% Faster market

introductionpension products

30% Cheaper implementation

processes

30% Cheaper implementation

processes

20% Less duplication20% Less duplication

60% Knowledge pension products

more accessible

60% Knowledge pension products

more accessible

95% Reliable service in

accordance SLA

95% Reliable service in

accordance SLA

MissionMission

GoalsGoals

Measurable

goals

Measurable

goals

Projects

and activities

Projects

and activities

Mission Develop a Shared Service Center that is a

knowledge-and information-engine around pension products, by sharing forces to deliver better innovation

and deliver at lower cost high quality products and services to



What is directing?



What is directing

Directing is about linking demand and supply.

You must know what the customer (commisioner and the user)

wants, then translate it into a solution with the

necessary resources (sources) to

achieve and then arrange

that the services

is provided.

And to be able tot do that to you really need the right competences. The director will lead



The three columns of the enneahedron

Beheren en exploiteren ICT services

Beheren en gebruiken informatievoozieningen

Ontwerpen en exploiteren

bedrijfsvoering

Implementing

Ontwerpen en plannen ICT service

Ontwerpen en plannen informatie voorziening en regie

Ontwerpen en plannen bedrijfsvoering

Organizing

Bepalen strategieICT service

Bepalen strategie informatie voorziening en regie

Bepalen strategie bedrijfsvoering

Aligning

ServiceDirectingManagement

Business

Directing

Supplier organization



Beheren en exploiteren ICT services

Beheren en gebruiken informatievoozieningen

Ontwerpen en exploiteren

bedrijfsvoering

Implementing

Ontwerpen en plannen ICT service

Ontwerpen en plannen informatie voorziening en regie

Ontwerpen en plannen bedrijfsvoering

Oganizing

Bepalen strategieICT service

Bepalen strategie informatie voorziening en regie

Bepalen strategie bedrijfsvoering

Aligning


The three rows of the enneahedron

View and governance

Planning, organization and projects

Implementation andoperational service delivery



Management and exploitation IT and FM services

Management and use facilities

Use and exploitation

Implementing

Design, build and implement IT and FM services

Design and implementation facilities and information supply and control

Design and implementation

Organizing

Specify IT and FM services

Specify strategy facilities and information supply and control

Specify strategyAligning


A framework for managing sourcing



ImplementingManagement and exploitation IT and FM services


Use and exploitation management



Design and implemantation management

Organizing

specify IT and FMservices

specify strategy facilities and information supply and control

specify strategy and management

Aligning


Cmmi process areas in the 9 grid model

Monitoring quality

Performance mgt and analysis

Project Monit. & Control

Supplier mgt.

Change management

Purchase & tenders

Governance

Account Mgt.

Strategy & Collaboration

Service Portfolio management

Architecture Management

Demand Management

Demand & failure settlement

Account &Demand mgt.

Management

Contract & Supplier mgt.



Processmodel for directing



– There are three primary process chains in the directing organisation:

– Innovation Management, develop new services

– Change management, implementation of changes to existing services (doing projects, etc.)

– Service management, performance and direction on the existing services

– The processes are derived from the CMMi-ACQ model. By process chain KPIs (Key Performance Indicators) set.

Process chains directing organisation



ImplementingManagement and exploitation IT and FM services


Use and exploitation management



Design and implemantation management

Organizing

specify IT and FMservices

specify strategy facilities and information supply and control

specify strategy and management

Aligning


The chain shows three dominant lines

Monitoring quality

Performance mgt and analysis

Project Monit. & Control

Supplier mgt.

Change management

Purchase & tenders

Governance

Account Mgt.

Strategy & Collaboration

Service Portfolio management

Architecture Management

Demand Management

Demand & failure settlement

Innovation

Managing changes

Service continuity



Explanation process model demand/supply

– Organization is focussed on matching present and future customer IT service needs and demands with (contracted) services from supplier(s).

– The total organization should be seen as a logistic process (coordination between supply and demand). Each activity in this logistic process must be indicated either as a coordination of daily business or as a change in services rendered or as an innovation in services being supplied

– The activity is then attended to by the appropriate person/office in the logistic process and brought to a good result



Process model detailedSupplyDirectingCustomer/

Demand

Delivery of services

Incident management

Measurement en analysisOpera-tional

meeting

Tactical meeting

-

Change process

Innovation

Request for change of Product orservice

Request forNew product

or service

complaints within SLA

Management of complaints

Results customer satisfactionsurvey

Monitoring KPI’s

complaints outside SLA Improvement

services / solve incidents

Reports

Structural problems

Proposal for impovement supplier

Proposal for renewal supplier

Proposal for improvement

Proposal for renewal

Governance

Service portfolio mgt

Architecture mgt

Procurement & tender

Strategy & coorporation

Monitoring KPI’s


reports

Strategic

Tactic

Operational

Strategical

meeting

Project monitoring control& Monitoring KPI’s


complaints Service & incidents



Bounderies of IT supplySupplyDirectingCustomer/

Demand


Incident management


meeting

Tactical meeting

-

Change process

Innovation



or service




Monitoring KPI’s



Reports

Structural problems





Governance


Architecture mgt



Monitoring KPI’s


reports

Strategic

Tactic

Operational

Strategical

meeting






Innovation process (1/2)

Start

Global AnalysisInitiation Detail Analysis

Contracting

3 Agree terms and contract with supply

Inventarisation of customer requirements

1a Develop customer requirements

1b DevelopProduct requirements

1c Analyse and validate requirements

Prepare Project

2a Estimate planning and forecast

2b Develop projectplan

2c Get commitment for the project

go

No go

Input

Service portfolio management

Input

Governance

Architecture management

Output

Functional Design

Input

Strategy & colaboration

Output

Business case with P.I.D

Input

Procurement and tenderprocess

DemandmanagerDemandmanager

Projectmanager

ContractmanagerSuplly mgt

Output

Contract

go

No go

go

No go



Innovation process (2/2)

Productintegration Verification

5a Prepare verification

5b Testing

5c Check selectedproducts

6a Prepare productintegration

6b Ensure interface-ompatibility and deliver the product

The innovation process

Input Developed

products

Decision making about testgroup

& test environment

Input

Testresults

Output

Acceptationproducts

Demandmanager

Contractmanager

Demandmanager Contractmanager

Suplly mgt

Develop technical solutions

4a Select product-component

4b Develop the design

4c Implement the product design

Projectmanager

Supply mgt

Input

Contract &Functioneel Design

Management

Preparation & test ImplementationDevelopment



Change process

Start

The change process

Initiation

Management

Alternative analysation and choice of solutionReq. management

1 control requirements

2 Evaluate alternative solutions

Demandmanagement

Contractmanagement

Configuration mgtProjectplanning

3 Develop projectplan

4 Track and manage changes

Product integration

5 Prepare product-integration

6 Ensure interface- comptability and produce solution

DemandmanagerDemandmanagement

SupplyContractmanagement

Development Implementation

No go

go

No go

go

Analysation



Incident process

Start

ICT Management stage

1st line support

Administration

Classification

Incidententry

Incident solved

Yes

No2nd line support

Design and specifications of the solution

Solution or escalation

IntakeFrontoffice

2nd line support

1 RegistrationClassification

call

2 Relationship call

10 Decline call

11 Declineuser

5 Escalation

6 Analyse Incident 1st line

support

8 Solve Incident 1st line

support

3 Inform coördinator

4 Take Care

existing incident

Measureexceeding

Supply mgt

7 AssignIncident

9 Manage progress

ja

Nee

ja

self

The incident management process

Supply Front Office Supply Back Office

Deeper investigation incident

Distribution and administration of activities and solution



Roles within the directing organisation



Management and exploitation IT and FM services


Use and exploitation

Implementing



Design and implementation

Organizing

SpecifyIT and FMservices

Specify strategy facilities and information supply and control

Specify strategyAligning


The areas plotted on the IT management framework

Sourcingmanagement

Project mgt and collaboration

mgt

Account andPortfolio mgt

Contract mgtand performance

monitoring

SourcingServices

Information management

FunctionalApplication

mgt

Goverance and architecture



Directing roles in Governance and Architecture area

– The Director (CIO) will carry the ultimate responsibility for overall information and ICT chain and is sparring partner for the management of ICT-related issues

– The information architect designs and implements organisation-wide information architecture (applications, hardware, networking, datacom)

– The business architect designs the business processes and frameworks and enter the correct application of the process frameworks. Together with the ICT architect, a risk analysis in case of changes in processes or applications will be made



The information management area

– The Information Manager advises on solutions in the field of ICT for business to better support in achieving their objectives. It is a long term vision and planning and should develop a framework for planning and assessment of renewal and modification of information systems.



Account and Portfolio mgt areas

– The ICT consultant advises organisation-wide, sought and unsolicited, on solutions in the field of ICT business in order to better support their goals using ICT solutions

– The Information Analyst focuses on analyzing and advising on how the information flows within the customer organisation can be supported by the current system landscape



Project mgt and collaboration mgt

– The Project manager executes projects in the field of ICT (from the initiation tot the transfer to the existing organization)



Contract mgt and performance monitoring

– The Contract Coordinator focuses on the creation and implementation of the supplier strategy, mapping product / vendor combinations and building and maintaining existing relationships

– The Purchaser focuses on the procurement of services, and if products and people at the right price, performance levels, and compliance are buyed with contractual agreements is that can be monitored

– The Demand Manager focuses on developing and maintaining relationships with external ICT suppliers and on the steering / leading the team in - and outside staff responsible for the daily operation (including Service Desk and Field Services)



Sourcing management area

– The Service Level Coordinator is responsible for monitoring and managing the delivery of agreed ICT products and services by external parties as defined in Service Level Agreements on quality, availability and cost.

– The Project & Change Coordinator, will direct on all new and ongoing projects and (big) changes regarding the ICT systems (internal and external capacity, content, planning, budget, priority)



Sourcing Services area

– The keyuser provides the functional management of one or more applications tailored to the specific business processes.

The key point of the users are from a group of users to use a specific application and the application of this application within a sector or management.

– The process specialists support the key user for the translation of the process of sector specific management or automated applications. They are experts in the field of process and work within the framework of the business architect suggests.



The Functional application mgt area

– The Functional Application Manager provides the functional management of one or more applications tailored to the specific business and focuses on analyzing and advising on how the information flows within the organisation can be supported by ICT applications. He/She will also support in testing and implementation of changes.

– The Technical Application Manager is responsible for the availability and performance of the ICT systems



Roles plotted on directing modelSupplyCIOCustomer/

Demand


Incident management


meeting

Tactical meeting

-

Change process

Innovation



or service




Monitoring KPI’s



Reports

Structural problems





Governance


Architecture mgt



Monitoring KPI’s


reports

Strategic

Tactic

Operational

Strategical

meeting




ICT consultant

Information analist

Business architect

Functional application mgt

Application mgr

Purchaser

Contract manager

Superuser

Projectmanager

Informationmanager

Information architect

Project and change coordinator

Director(CIO)

Demand manager



Some principles for directing competences

– 1st generation sourcing and directing asks for CMMI level 2

– 2nd generation asks for CMMI level 3

– 3th generarion asks for new competences in managing colaboration and CMMI level 4

– 4th generation asks for personal leaderschip and at least CMMI level 4

– Directing competences are professional projectmanagement, managing change management, account management and supplier management all at the desired CMMI level

StrategicLeverage

Bottleneck Routine

Business ProcesOutsourcing

Backofficeoutsourcing

Outsourcingworkplace mgt

Businessdevelopment

Shared ServiceCentersDataCenter

outsourcingFacilitiesoutsourcing

Workinnovation1e generation sourcing 2e generation sourcing

4e generation sourcing



Crowdsourcing

Operationsoutsourcing



At the end…

– Setting up a directing organisation (the new ICT organisation) is a radical change….use the change colours

– Filling in the roles is changing competences and changing people

– A clear process model will help to implement the directing activities

– Always use the three models; 9 grid, Kraljic and CMMI



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Frank [email protected]

www.twynstragudde.nl